The Ifo Business Climate Index climbed to 109.9, above a reading of 109.8 in March and exceeding Bloomberg's consensus expectations of a drop to 109.5.

The slight rise was driven by an increase in businesses' assessment of their current situation while their six-month outlook remains unchanged from last month.

By sector, business climate improved for manufacturing, fell for construction, decrease slightly for wholesaling and increased slightly for retailing.

U.K. Retail Sales Rise

UK retail sales for March rose 1.8 percent from February, the fastest increase in more than a year, the Office for National Statistics said on Friday, compared to February's decline of 0.8 percent and Bloomberg's consensus expectations of a 0.5 percent gain.

From March 2011, sales rose 3.3 percent.

The big gain was partially driven by the country's warm weather and panic-buying of fuel in anticipation of a strike by fuel tank drivers. However, the report was still regarded as a positive sign for the UK economy.

The government will be breathing a sigh of relief...it looks like the first quarter might squeak out a small positive expansion in output, said David Tinsley, economist at BNP Paribas, according to Reuters.